Keeping Employees Happy Goes Beyond Monetary Compensation

Pay matters to an extent but not as much as you think. The key to employee retention resides in the perks and benefits you provide that create a pleasant workplace.

Keeping Employees Happy Goes Beyond Monetary Compensation

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Three of our employees quit within a month. This was awhile back and as you might expect, morale was low. In their exit interviews, we asked why they had made their decision. We got a variety of answers, but each brought up money as an important factor.

They left on favorable terms, serving out notices and returning their gear in acceptable condition. Good thing too, because a few months later two were asking for their jobs back. Their reason? The little extra cash at their new job wasn’t worth it because they weren’t being treated well. They missed all the details that make our company a pleasant place to work.

Part of recruiting and retaining employees is compensation. But salary isn’t the whole story. Benefits and perks may impact workers more than you think.   

Employee satisfaction requires job security and financial stability. These are simple concepts but ones you can only influence, not control. You can’t govern people’s emotions, so “making” them feel confident is not possible. You can compensate them well, but how they spend their money and past mistakes may undermine their security.

Everyone brings their own insecurities, baggage, and assumptions to a relationship, even professional ones. It’s impossible to make certain everyone feels protected in their position and well-compensated all the time. One point you can’t argue, though, is that it’s about more than just a paycheck.

Workers understand that while jobs are plentiful, great companies and good bosses are hard to find. Skilled workers have the luxury of being picky, so paying attention to extras is one tactic for building your workforce. 

What’s the difference between a benefit and a perk, and how can they help you retain employees?

Benefits

A benefit is nonwage compensation that supplements pay. These programs often take care of basic needs like health coverage, disability or life insurance, paid time off, and retirement accounts. They are expensive but have a huge impact on employee retention. 

If you think you can’t afford employee benefits, I would encourage you to seek help and get innovative. Talk to a business insurance broker and see what options are available to you. It’s OK to start with something small.

The good news is you benefit too. Employee benefits bring home-life stability and financial security. This translates into more reliable and lower-risk workers.

If you pitch in on the cost of benefits, they should realize that. They’ll know the quality of their compensation if they understand the price tag. To make certain that employees are taking advantage of offerings, arrange training on access and use.

Perks

Perks are more like bonuses that relate to business culture or values and help employees do their jobs better. Examples include gym memberships, access to financial wellness programs, and company-sponsored meals. 

Here you can let the personality of the company shine. It may be as simple as letting your employees run a personal errand in the company truck or a grand gesture like box seats for football playoffs.

Have fun and get creative. You don’t have to spend a lot of money. I’ve received more brownie points for remembering to keep butterscotch candies and chocolate on hand than I have for big company parties. I’ve learned over time what my employees appreciate. They love digging into a candy bowl at the end of a long day. These things cost little, but our team appreciates them. Ever seen a grown man giddy over chocolate? I have. 

Value and Gratitude

Both benefits and perks have positive effects on morale, motivation, and engagement at work. Still, employees will ask for raises. 

In most cases, the effect of a raise is very short term. Research shows that pay increases do little to motivate employees or earn their loyalty. Everyone — and I mean everyone — thinks that they could and should make more money. So we expect pay raises. We aren’t grateful or surprised by them. Instead, we think to ourselves, “Finally! I’m getting what I deserve.”

That small boost of positivity lasts only a few weeks. Then, we adjust to our new reality — and the new car payment — and we go back to feeling as poor and undervalued as always.

Unsatisfied Employees

No amount of insurance or chocolate will fix a bad employee fit. If your compensation package doesn’t satisfy an employee, it may be time to suggest they find new employment.

If you can identify, articulate, and advertise your full compensation offer — perks included — you’ll get better job applicants. Attracting the right candidates allows everyone to enjoy their day more and pays positive dividends to your efforts. 

Over time, you’ll have a team of people who share your values. This will build trust with your workforce, letting you develop a healthy company culture. 

Budget

Before you add a perk or benefit, understand the price tag. Expenses that hit your bank account aren’t the only ones that matter. Consider opportunity costs and other “hidden” obligations.

Time off — paid or not — affects your revenue. Driving the truck home adds mileage and changes wear and tear expenses. A nice coffee machine is glorious on a cold morning but also encourages employees to hang out.

Before you spend big on well-intentioned benefits that might not matter to your team, talk to them about your ideas. Be transparent about the costs and help them recognize what they are giving up instead. An open dialogue can reap big rewards and help steer you in the right direction for how to use your limited resources.

To avoid employees taking these things for granted, we calculate the total cost of employee benefit packages and perks. We call this their “true” hourly rate, which gets discussed during annual reviews. It’s not something to throw in their faces. Rather it’s something to help them better understand the value that we add as an employer in reward for their hard work.

You can’t control employee happiness, but you can positively shape their lives. Show your staff you care about them and they will stick around longer and work more productively. 


About the Author

Anja Smith is managing partner for All Clear Plumbing in Greenville, South Carolina. She can be reached at anja@acpupstate.com.



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